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The U.S dollar dropped after the Fed's meeting


11 June 2020

The U.S dollar traded lower against other currencies and hitting three-month low after Federal Reserve left interest rates unchanged and after an unpleasant U.S economy data release.

On Wednesday, investors left worried about the greenback future after the Federal Reserve left interest rates unchanged and indicated that interest rates will remain around 0% to 0.25% through 2022. Furthermore, the U.S GDP is anticipated to drop by 6.5% and the unemployment rate at 9.3% until the end of the year. Additionally, the U.S Consumer price index last month declined by 0.1% and the Consumer price index excluding Food and Energy also declined by 0.1% last month.

The U.S. Dollar Index, which measures the strength of the dollar against a basket of six major currencies, closed Wednesday’s trading session lower at 96.06.

Over in Europe, the Common currency traded higher against the U.S dollar gaining from weak greenback despite negative data in the Eurozone. Investors are currently concerned about the Eurozone economy after France, the second-largest economy in the Eurozone showed that the industrial output dropped by 20.1% for April, more than expected of 20% drop. The EURUSD ended the session at 1.13749.

In the United Kingdom, the Great British Pound was slightly higher against the U.S dollar. However, the Sterling is under pressure as investor confidence in the UK’s economy weakened due to the Brexit deal and Coronavirus.

Brexit negotiations of trade talks between Britain and the EU finished with little progress and lacked development influencing the GBP negatively. Besides, coronavirus death toll weighed on the currency as more than 50,000 people have died from COVID-19. The GBPUSD ended the session at 1.27446.

In the Safe-havens area, the Swiss Franc traded higher against the U.S. Dollar and ended the session at 0.94361 USDCHF. Likewise, the Japanese Yen ended the session higher for the third day against the greenback at 107.119.

Gold prices gained on Wednesday session and closed higher at 1738.16 after the Federal Reserve left interest rates unchanged as investors shift their investments to Gold during economic uncertainties.

In Australia, the Aussie dollar traded higher against the U.S dollar despite mixed data. On Wednesday, data showed that Westpac Consumer Confidence rose by 6.3% showing signs of improvements. However, Home loans dropped by 4.4% and Investment Lending for Homes dropped by 4.2% in April. The AUDUSD closed the session at 0.69970.

Cryptocurrencies Traded higher, as Bitcoin closed the session higher at 9853.00 BTCUSD and Ethereum at 245.36 ETHUSD. However, Litecoin ended the session almost flat at 44.31.

#source

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